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Op/Ed

ListingDoor model and assertions are not only offensive to Realtors, but wildly inaccurate

ListingDoor, built by a veteran Realtor says they save buyers from paying broker’s commissions, which they call a “loss of as much as 40 to 50% of home equity.” What?!

listingdoor

A statement circulated today by ListingDoor.com proves the old truism that “All real estate is local” and rides the new wave of websites promising to help homeowners sell their homes better, faster, cheaper, all by themselves. They’re calling themselves the “Uber” of real estate. Interesting…

Last June, I wrote here about OpenDoor.com’s $9 million launch that promised an oh-so-similar result (“Sold. The Minute You’re Ready,” the site brags). A quick check today shows a whopping 45 move-in-ready homes listed on their site for sale, all in the Phoenix, Airzona area. I tried entering various zip codes and addresses from across the country, as if I was a homeowner trying to use their service, with no luck. I’m not worried that homeowners in 95 percent of the United States will be trying this any time soon.

“Veteran Realtor” launches startup with recycled model

Today the launch is ListingDoor.com – similar name, similar vision, and even more hyperbole in their promotional materials.

Let’s start with the first sentence of their press release: “In response to the thriving FSBO market, veteran real estate broker and author Sissy Lappin launches ListingDoor.com, providing profitable and powerful marketing tools for homeowners, giving them everything they need to successfully sell their home on their own.” While some parts of the country are experiencing inventory shortages and perhaps FSBO’s have an easier time than in the recent past, this is by no means a nationwide phenomenon. I am not sure where she is seeing a “thriving FSBO market” but it is not everwhere.

Lappin states that “today homeowners are privy to all the same market information as real estate agents, allowing homeowners to efficiently determine the value of their home.” Really, as Zillow has proven? Because the “Zestimate” is never wrong?

The site states that a homeowner plugs in basic data and they will churn out a market report and advise in pricing. AVMs (automated valuation models) are better than they used to be, true. But in many parts of the country, especially rural areas without lots of data points, the valuations are more often skewed (extremely high or low) than they are correct.

Why would a broker say AVMs are superior to CMAs?

I find it interesting that Lappin, a real estate broker, would tout that an online computer modeled valuation would be more accurate than a skilled agent in pricing a home.

Take for example the “best house in the neighborhood.” You have a high-end home that has numerous upgrades and amenities unseen from the street and are not reflected on a tax parcel card. This luxury home sits in a predominantly middle-class neighborhood where homes are of builder-grade, no upgrades, and less square footage. Do you think that this home will be priced more accurately by a computer model or by a in-the-flesh neighborhood expert?

These business models imply agents are just door openers

What all of these sites discount or take for granted is that agents do much more than hand you a CMA and suggest a price. They are more than door openers and open-house-sitters.

A good agent does his/her job well and gets the house sold for the highest price possible in the least amount of time on market (if that is the seller’s goal). A great agent counsels and advises, listens to the seller’s needs and take all of this into account as they guide the seller through the maze of a process.

I take offense to ListingDoor.com’s statements

While I am obviously not a fan of any site that proposes to “cut the middle man” (the agent) out of the transaction as if we hold no value, I take offense to this site’s twisting of statistics and figures to pull at a viewer’s gut.

ListingDoor proposes that a broker’s commission is a “loss of as much as 40 to 50% of home equity.” So a commission is not a “fee” – it is the broker stealing up to half the seller’s home equity. Wow. Talk about sensationalism.

Market online, but not the MLS… what?

In addition to their offering a market analysis (which is actually NOT market analysis, as no human is analyzing the facts and figures and analyzing anything, it is a computer generated crap shoot), the site states that they promote the house online and in social media marketing – but do not use the MLS.

While I agree social media marketing is crucial in selling homes these days, the MLS is still alive and kicking (and the standard source of syndication to all of the real estate portals). You can advertise on social media, but many active homebuyers will contact their own buyer’s agent in order to then make that appointment.

Avoiding the MLS cuts out any buyer’s agents who may not be aware of your home, as well as those who choose not to show FSBO’s as part of their business model (we won’t go into the ethics of this here, as that is another column completely).

“Avoid the pitfalls that come with using a real estate agent,” the site says

To drive the point home one more time, ListingDoor states that they teach you “step-by-step the right way to sell your home and avoid the pitfalls that come with using a real estate agent.”

Wow. What an amazing statement. This site’s entire marketing push seems to be that real estate agents are the enemy to avoid. We steal your home’s equity and somehow make it harder and more dangerous to sell with us than without us.

The bottom line: ListingDoor ignores the agent’s value

Cutting out the “middleman” may work in some markets, for some sellers who have expertise and knowledge in handling negotiations and transactions – but it’s not for everyone. Buying and selling a home may be the biggest financial transaction someone may make. This isn’t filing your 1040EZ form through Turbo Tax.

I personally wouldn’t want to represent a seller who feels I bring no value to the table, and that my knowledge and skills can be replaced by a computer model. The first hurdle in the sale is finding a buyer. After that is when an agent’s true value is realized, as we keep the deal together and delicately negotiated through the weeks and perhaps months required to close a loan these days.

Our value is not just in pricing a home and filling in the blanks in a contract. When the deal threatens to fall apart, that’s when “salespeople” disappear and “experts” emerge.

#ListingDoor

Written By

Erica Ramus is the Broker/Owner of Ramus Realty Group in Pottsville, PA. She also teaches real estate licensing courses at Penn State Schuylkill and is extremely active in her community, especially the Rotary Club of Pottsville and the Schuylkill Chamber of Commerce. Her background is writing, marketing and publishing, and she is the founder of Schuylkill Living Magazine, the area's regional publication. She lives near Pottsville with her husband and two teenage sons, and an occasional exchange student passing thru who needs a place to stay.

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